The Ogden Discount Rate: What is it?
Compensation awards are designed to put a claimant in the same financial position had they not been injured. The award is based on future losses which are likely to consist mainly of loss of earnings and cost of care.
Designed to ensure claimants are not under or over-compensated, the courts apply a calculation called the Discount Rate. This adjusts the personal injury damage award to take into account the return expected over time when a compensation lump sum is invested. This rate is set at a level to reflect the return available, on the lowest risk investments, typically index-linked gilts (the value of which has been falling since the financial crash in 2008).
From 20 March 2017, the Discount Rate changed from 2.5% to -0.75%.
Click here to watch and listen to the RSA Ogden webinar
Click here to download our information guide
Click here to download the slides from our Understanding the Impact of the Ogden Discount Rate webinar
Click here to view the new tables published by the Government Actuary's Department
To discuss the impact of this change, or any other aspects of insurance, please contact your RSA representative.